Maduro replaces head of economic team after 5 weeks

epa05155608 A handout picture provided by Miraflores Palace shows to President Nicolás Madur during an official event in Valencia, Venezuela, 11 February 2016. Maduro announced activation of the economic emergency plan after the support expressed by the Supreme Tribunal and despite rejection of the National Assembly. The plan is designed to battle the 'economic war' Maduro said the country is fighting.  EPA/Miraflores Palace / HANDOUT EDITORIAL USE ONLY/NO SALES

Washington / AFP

Venezuela’s President Nicolas Maduro named a new head of his economic team just five weeks after he had handed the job to a widely criticized professor who blamed the world’s fastest inflation on the country’s “parasitic” business class.
Luis Salas, who had held the post as economy vice president since Jan. 6, is leaving for family reasons, Maduro said on state television late Monday.
He named Miguel Perez Abad, who was serving as commerce minister, to replace Salas, adding that he would make further economic
“Because of family matters that he has been attending to, Luis Salas will go on to work on other activities with the economic teams and directly with me,” Maduro said, without giving details of his new responsibilities.
The move comes amid concern the oil-dependent country is heading toward a default after oil fell to a near 12-year low and analysts questioned if Maduro has the political capital needed to make reforms, such as raising gasoline prices and devaluing the currency. Venezuela’s benchmark dollar bond fell to the lowest since it was first sold in 1997 last week after a local newspaper reported that Salas had proposed stopping payments on foreign debt.
Perez Abad, a businessman, was a previous president of the Venezuelan business chamber, Fedeindustria. Russ Dallen, a managing partner at Latinvest in Miami, said in an e-mailed response to questions that the new economy head maintains close links to Eulogio Del Pino, the oil minister and president of state oil company Petroleos de Venezuela SA.
“Luis Salas was a very radical man,” Asdrubal Oliveros, director of the Caracas-based consulting firm Ecoanalitica, said in an interview. “They were never able to reach even minimal agreements in the economic cabinet because of his presence. While Perez Abad may understand a lot about the economy, the problem is Maduro and the question is if he is capable of taking the necessary measures.”
Salas, a 39-year-old university professor, argued in a economic pamphlet published last year that inflation doesn’t exist “in real life” and is instead a phenomenon caused by speculation, usury and hoarding.
Venezuela’s Supreme Court last week overruled the opposition-controlled national assembly to grant Maduro the emergency powers he says he needs to fight triple-digit inflation and the deepest recession in over a decade. The International Monetary Fund estimates that inflation in Venezuela, which already stands as the world’s highest, will spiral to 720 percent this year. The economy is expected to contract for the third consecutive year.
“I was shocked to see Mr. Salas appointed to head the economic cabinet in the first place, especially since he had no economic or business training and had such ridiculous notions of the economic laws of supply and demand,” Dallen said. “But the rapid change after just five weeks is also shocking. It shows a government in chaos. At this point you have to wonder if they are just changing violinists in the band on the Titanic.”

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